As we on this side know, this government is a shambles. Malcolm Turnbull rolled Prime Minister Abbott based on the false promise of a new economic leadership and, allegedly, to usher in new politics where slogans would give way to advocacy. This new economic leadership has failed to appear, and 162 days and 13 or 14 ministers later we are seeing an unravelling government that has no tax policy—indeed, no policies at all—to help everyday Australians. The best Malcolm Turnbull can offer is a weak, scare campaign—
The ACTING DEPUTY PRESIDENT ( Senator Bernardi ): Senator Bilyk, I am going to ask you to refer to the Prime Minister by his title or as Mr Turnbull.
Senator BILYK: The best Mr Turnbull can offer is a weak scare campaign slogan on opposition policy. Mr Turnbull decided that his government is so devoid of policies, so lacking in ideas, so lacking in vision and a Treasurer so hopelessly and obviously out of his depth they would launch an old style Mr Abbott scare campaign about negative gearing. It is utterly remarkable that just months out from a federal election the government has no plan at all on taxation. So we have had months of the government secretly dipping their toes into the water to test whether a GST change was palatable.
Leaked COAG documents show that the government put a number of options relating to changes to the GST on the table. The first few options include lifting the GST to 15 per cent, lifting the GST to 12½ per cent and expanding the base to include all food and non-alcoholic drinks, and raising the GST to 15 per cent while expanding it to include food and non-alcoholic drinks, water and sewerage. They deviously did not articulate any of these options to the Australian people. Why? Because they know just how unfair they are. An increase in the GST will be an increased tax on everything—fresh food, health, education. As we know, a 15 per cent GST on everything will cost families an extra $7.4 billion in school fees and other educational expenses in the first year alone. Treasury figures show raising the GST to 15 per cent and extending it to fresh food would hit families for another $9.45 billion a year—an extraordinary impost that, as always with the GST, would fall hardest on those with the least to spare. We know that this is utterly heartless and cruel. These are the policies that we have not actually seen yet—but we hope that we eventually will, because there could be an election in a couple of months. We are still waiting on the government to articulate any policies—but we do know that being cruel and thoughtless is a common thread in this government.
The Liberals are still in confusion about their position on the GST. Just recently, we had one minister, Senator Cash, in fact, say just last week that a 50 per cent rise in the GST was still on the table of tax proposals being considered. The employment minister told Sky News:
We haven’t taken it off the table completely, not at all.
This contradicted Prime Minister Turnbull, who told reporters in Rockhampton on the very same day:
I can assure you the government will not be taking a proposal to increase the GST to the election.
That leaves me with one or two thoughts: if they get re-elected then either they are going to do it anyway and just not bother being honest about it or they have realised their plan to increase the GST is unpopular because it is so unfair, and they would just like the issue to go away. The government has spent the last six months with the ‘Will we? Won’t we? Will we? Won’t we?’ conversation on the GST and, as we know, they are now left with no policies on taxation at all. They have wasted the first 2½ years of their three-year term failing to develop policies, and now they expect that whatever thought-bubbles they come up with in the next couple of months will be good enough. I can assure those opposite that the people of Australia do not think that that is good enough.
Last week, the Treasurer, Mr Morrison, gave one of the worst speeches in living memory of a sitting Treasurer at the National Press Club. Worst speech in living memory of a sitting Treasurer: 46 minutes of waffle! Even people on this side felt embarrassed and sorry for him. This was his moment to shine. He was at the National Press Club. This was his moment to take economic leadership and define how he would make the taxation system fairer—and he failed. He failed big time. It is obvious that what he wanted to talk about was a GST—and that rug had been very nicely pulled out from underneath him. All that was left were platitudes and meaningless glib statements.
I know that the great Australian dream for young people is to buy their own home. Labor has a plan to make the taxation system around housing fairer. The negative gearing and capital gains tax changes announced by Mr Shorten and Mr Bowen will deliver the most important structural budget reform in a decade. These changes will improve fairness and make a real contribution to tackling housing affordability. On negative gearing, Labor will modify the system so that investment losses can only be offset against wage income for new properties, new builds. This will help channel investment into new housing supply to improve affordability.
A strong housing market is central to Australia’s successful transition out of the mining boom, and directing investment towards new building starts will obviously also improve jobs, investment and growth. Despite Mr Morrison peddling propaganda, the current tax concessions on negatively geared property overwhelmingly go to those on the highest incomes. The government’s own Re:think tax discussion paper tells us that fewer than one in seven Australians earning a middle income claim negative gearing deductions. So, even though those on the other side say, ‘All the negative gearing is done by nurses and school teachers,’ we know that that is not true. Almost a quarter of the people earning $250,000 claim for negative gearing. So the top 20 per cent of income earners receive about half of all the benefits of negative gearing. Importantly for existing properties and other asset classes, our changes will mean investment losses can still be offset against other investment income and the final capital gain, directly linking the deductions claimed to the specific class of earnings. This will align Australia’s rules more closely with those already operating in other advanced economies. We will also halve the existing capital gains tax discount to 25 per cent.
When the current discount was introduced in 1999, Australia was running a $12 billion surplus in the most favourable economic climate in a generation. Today, we are facing a $37 billion deficit as our economy switches gears and we continue the long climb back from the depths of the global financial crisis. While fairness is front and centre of our policy approach, these changes are also good economic policy. As observed by the recent Financial System Inquiry, reducing the capital gains tax discount and negative gearing concessions would lead to a more efficient allocation of funding in the economy. This would lead to more productivity-enhancing investment and more economic growth and jobs. Significantly, these changes would take effect from 1 July 2017, with all existing investments fully grandfathered—that is, anyone who has already made an investment in good faith before this date will be unaffected by the new arrangements.
In deciding to pursue these specific reforms to negative gearing and capital gains tax, we in the Labor Party have been guided by our values. We believe that the tax load should be fairly shared and not get lighter the higher up the income scale you go. Labor know that there are 475 Australians with more than $10 million in their superannuation account and that they are living tax-free on the income from those superannuation accounts. We say that that is not fair and it is not sustainable. Labor have had our plans on the table since April of last year—the best part of a year—and we have had a fully costed plan for fairer super.
In addition, Labor want to tackle the issues of the multinational tax avoidance. In 2012-13, companies shifted over $300 billion from their Australian arms to overseas parent or subsidiary companies. We want to close the loopholes that allow big multinationals to send their profits overseas. Unlike the government, who want to cut funding to schools and hospitals, we think that multinationals should pay their fair share of tax.